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Flows on show during June quarter as NZ retail market tests $100bn level

October 7, 2018

The NZ retail funds market saw gross inflows increase almost 20 per cent year-on-year during the 12 months to June 30, according to new data from Australian research house, Strategic Insight (SI).

Over the year investors ploughed $26.1 billion into retail products (comprising mainly KiwiSaver funds and unit trusts), representing an increase of 18 per cent compared to the previous annual period.

“… during the June quarter reported inflows increased 8.3%,” the SI report says. “Mercer, Generate, BNZ, ASB, BT/Westpac, Milford and Kiwi Wealth all reported 20% plus, indeed in the case of the first three much higher, increases in their annual inflows.”

However, after outflows and including investment returns the retail funds market grew 14.4 per cent over the year – representing net growth of $12 billion split almost evenly between inflows and performance.

Of the top 10 managers only Mercer and AMP recorded single-digit net retails funds growth for the 12 months to June, turning in figures of 8.9 per cent and 5.3 per cent, respectively.

As per recent trends, BNZ was the fastest-growing retail manager over the June quarter – up 8.3 per cent – followed by Milford (7.2 per cent).

Both Booster and ASB reported quarterly growth above 5 per cent with the remaining top 10 firms falling into a range between 1.9 per cent (AMP) and 4.3 per cent (Fisher).

While market share positions remained mostly steady over the June quarter, Fisher jumped slightly ahead of Mercer during the period to claim the spot as NZ’s fifth-largest retail fund manager. AMP and BT/Westpac saw their respective market shares slide 0.3 per cent and 0.2 per cent over the three months to June 30.

For the 12 month-period, AMP has seen retail market share fall from 13.1 per cent to hit 12 per cent as at June 30. Meanwhile, both Milford and ASB have been the biggest market share winners rising 0.8 per cent and 0.7 per cent respectively. The SI figures show Milford has $5.5 billion under management (although the Auckland boutique now has about $6.5 billion in total across wholesale and retail) with ASB at almost $14.2 billion.

ASB now owns 14.7 per cent of the NZ retail funds market behind the country’s largest manager ANZ, which maintained its 28 per cent share over the June quarter (equating to almost $27 billion under management).

At close to $50.8 billion, KiwiSaver represents almost 53 per cent of the retail funds market, according to the SI report, with an annual growth rate of about 20 per cent. Other retail unit trusts grew 10.4 per cent to just under $38.5 billion during the 12-month period with the rest of the market filled by superannuation funds ($6.7 billion) and insurance/investment bonds ($295 million).

If growth rates held, the NZ retail funds market should have cracked through the $100 billion mark in the September quarter.